New Initiatives May Spark Development Near Smaller Airports in Latest Twist on Clogged Road Relief
In Southern California, where more than one-third of all drivers commute for hours a day, billionaire Elon Musk seeks to tunnel under freeways to avoid traffic jams that shrink free time and building options for developers. Now a new business is looking to the skies for a solution.
A regional air service provider is betting short-hop flights on planes running between the region's small, underused general-aviation airports can ease long commutes. It's a project that could spark development meant to cater to a growing number of new passengers and join projects near regional airports around the country, while Southern California is already drawing interest from rideshare service Uber.
Founded in 2018, FLOAT – an acronym for Fly Over All Traffic – is targeting what it calls "Super Commuters," who drive more than two hours round trip to work, for its upcoming service expected to launch in January making use of nine-seat Cessna planes linking commuters with stops at several small general-aviation airports operated by local cities and counties.
The privately funded FLOAT is based at Brackett Field Airport in La Verne, California, located near Pomona in southeastern Los Angeles County, and company leaders said the service has the potential to leverage nearly 40 general-aviation facilities now operating in Southern California. The first services are expected to start next year, with flights lasting no more than 15 to 25 minutes.
"We live in a rapidly evolving society of intense time management and instant gratification, and business professionals and their superiors are quickly realizing that spending hours in traffic is cutting into their productivity and work/life balance," said Arnel Guiang, co-founder and CEO of FLOAT.
If the so-far untested business plan works, demand could rise for airfield-adjacent stores, restaurants and other service businesses catering to those commuting passengers. It could also tie into a larger nationwide "aerotropolis" planning concept, in which several cities are putting commercial and residential development in close proximity to aviation facilities to overcome the negative effects of urban crowding and traffic congestion. As it stands, longstanding commuter patterns can keep development in already built areas.
Frustrating daily drive times in the Los Angeles area can span 90 minutes or more,
depending on how far from work commuters have decided to reside in order to find reasonably priced housing. That's led the Los Angeles area to gain a national reputation for bad traffic, depicted in major movies such as La La Land, and the clogged highways prompted Musk to form the Boring Co. to explore boring tunnels in parts of the area to ease traffic congestion.
A report released earlier this year by insurance firm Haven Life, based on Census Bureau data, showed that Southern California has four of the 10 U.S. cities with the longest average round-trip worker commutes. That list is topped by Palmdale in northern Los Angeles County, where the average round-trip commute is 85.4 minutes but 35% of the population spends more than two hours driving to and from work.
Reports based on Census data estimate more than 150,000 people in Los Angeles County spend at least 90 minutes commuting to work in each direction.
The company is surveying potential customers, including those on a list of about 1,000 people who said they would be interested in such service, for daily route suggestions. It is also in the process of making arrangements with airport operators to provide Monday-through-Friday service to traffic-plagued destinations such as West Los Angeles, the San Fernando Valley, Orange County and the Inland Empire to the east of greater Los Angeles.
Planes, Bicycles, Taxis
FLOAT plans to use nine-seat Cessna Caravan propeller planes and charge users a monthly fee – currently estimated at $1,250 per person – for service during the workweek. After arriving at their destination airport, customers will need to make their own last-mile arrangements – such as bicycles, taxis or ride-hailing services – to get to their workplace.
Lisa Walker, a media adviser to FLOAT, said that with all of that figured in, the cost of these flights will not be much more than what the transportation industry figures as the cost of driving for workers in Southern California. Walker points to the IRS standard for figuring corporate car mileage expenses, currently at around 58 cents per mile, which would amount to a monthly commuting cost of about $1,100 for drivers in the region who have the longest commutes.
Because of its daily commuter focus, Walker said the service will differ from other existing member-based charter flight services currently offered near small and large airports, which are generally more expensive and geared to high-income professionals looking to avoid the hassles of commercial airports for business travel.
FLOAT officials said initial surveys earlier this year indicated customers were most interested in service between the Los Angeles neighborhood of Van Nuys, located in the San Fernando Valley, and the coastal city of Santa Monica. Other airports to be targeted for the short-hop service include those in Fullerton in Orange County, and Corona in Riverside County.
FLOAT is betting that the service will be well received by everyday suburban commuters, especially those facing grueling daily work trips between their homes in Southeastern LA County and neighboring Riverside and San Bernardino counties, and their jobs to the west in Los Angeles and Orange counties.
"More and more people have been moving far away from their jobs to find housing that’s affordable, and that’s just made work commutes longer and longer," Walker told CoStar News.
Walker said as services are established at the small airports, there could also be rising demand for food sellers and other convenience-oriented businesses, similar to what’s already in place in larger regional airports. Talks are in progress at the La Verne airport, for instance, to have food trucks available in the early days of service.
Aviation economist Bijan Vasigh said the FLOAT business plan appears to fit an unserved niche in markets like Southern California, long challenged to deal with the commuter problems created by workers’ flight to distant suburbs to find family-friendly affordable housing.
It’s also a big issue in regions like South Florida and Washington, D.C., and especially in places like San Francisco and Silicon Valley, where tech-oriented job growth has created skyrocketing housing prices and worsened traffic gridlock.
But to replace freeway slogs with daily quick-hop air service, Vasigh told CoStar News that FLOAT and others emulating the concept will need to bring in steady revenue and deliver on actual time savings, on top of the usual challenges of scaling any business.
Challenge to Execute
"It sounds like a great idea, but the devil is in the details," said Vasigh, a professor of economics and finance at Embry-Riddle Aeronautical University in Daytona Beach, Florida.
Vasigh said Southern California has an abundance of smaller airports located in non-congested areas that are also not far from major job centers. To make the plan work financially, however, he estimated FLOAT will need to bring in minimum monthly revenue of $13,000 to break even, assuming at least seven passengers per flight in the two or three planes that the service will use at the outset.
He said that’s a reasonable goal at current costs to fly those smaller planes, estimated at around $200 per hour, as fuel costs currently are at historic lows.
There could be other upshots for space demand around the smaller airports, which could draw in new eateries, auto-repair shops, gas stations and other service businesses geared to drivers. "That’s how airports make most of their money – it’s stores, restaurants, rental cars and these other things that serve the passengers on the ground, before and after their flights," Vasigh said.
He said business generation at smaller airports is tied to a larger nationwide development concept that seeks to create an "aerotropolis" by putting commercial buildings, housing and related infrastructure in close proximity to aviation facilities, in a bid to deal with inefficiencies created by chronic traffic gridlock.
Los Angeles, for instance, is on a list of test cities for upcoming new passenger and cargo delivery services being planned by Uber Air, the aviation unit of the ride-hailing technology company. Uber has already teamed with developer Hillwood on a skyport project nearing completion in the Dallas suburb of Frisco, Texas, making use of high-tech aircraft with vertical takeoff and landing capabilities. Uber's first Texas demonstration flights are expected in 2020 before the possible start of commercial service in 2023, pending government approvals.
Uber Air has also struck a deal with prominent developer Related Cos. to design and develop skyports, starting with a mixed-use community being planned by Related in the Silicon Valley city of Santa Clara, California.
Significant aerotropolis-oriented, mixed-use developments are also in the works near existing airports in major U.S. cities including Atlanta and Denver, and the concept is also being studied as a potential economic generator by communities in the San Diego region.
Vasigh said beleaguered Southern California commuters over time may be willing to pay more for the convenience of short-hop air flights, but the survival of FLOAT and other companies offering similar alternatives to driving will hinge on delivering actual time savings to those commuters. Providers must select the right routes, and the "last mile" portion of the trip to work cannot take more than around 20 minutes.
If the service proves effective, however, employers currently deploying their own corporate planes or hiring private charter services might instead choose to subsidize worker costs for the short-hop air shuttles.
"If you’re in a profession like doctor or lawyer, your time could be worth several hundred dollars per hour," Vasigh said. "But customers aren’t going to stay with you if you aren’t actually saving them time."
Article via: CoStar | Lou Hirsh | Nov. 19. 2019
All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner of will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Keywords: San Diego Commercial Real Estate For Sale, Commercial Property In San Diego, Commercial Real Estate In San Diego, San Diego Investment Real Estate, Commercial Property Management In San Diego, San Diego Commercial Property Management, Commercial Property Management San Diego, Managed Commercial Property San Diego, Commercial Property For Sale San Diego, San Diego Commercial Real Estate Leasing, Top Real Estate Agents in San Diego, Commercial Property in San Diego, Property Management Company San Diego, Real Estate Agent in San Diego, San Diego Commercial Real Estate Real Estate Agent Contact Us Brokerage, Property Management